U.S. President Donald Trump recently signaled the possibility of tougher sanctions on Russia, including secondary sanctions targeting countries that continue importing Russian crude oil. This move aims to increase pressure on Moscow to end its prolonged conflict in Ukraine.
Earlier this month, Washington raised tariffs on Indian imports by an additional 25%, bringing the total to 50%, citing New Delhi’s continued oil purchases from Russia. However, China – the world’s largest buyer of Russian energy – has so far avoided similar penalties.
According to Chinese customs data, Beijing imported a record 109 million tons of oil from Russia in 2024, accounting for nearly 20% of its total oil imports. India ranks second with about 88 million tons.
This massive inflow of Russian crude has become a critical “lifeline” for Moscow, enabling its economy to weather the impact of the prolonged war in Ukraine.
In response, U.S. lawmakers are pushing for the Russia Sanctions Act of 2025, which, if passed, would grant the President authority to impose tariffs of up to 500% on nations accused of supporting Russia. Senators are now awaiting Trump’s green light to bring the bill to a vote.
When asked by Fox News on August 15 about possible secondary sanctions on Beijing after the failed Alaska ceasefire talks, President Trump responded:
“At this moment, I don’t think it’s necessary. Maybe in two or three weeks, but not now.”
Experts suggest Trump is using the delay to negotiate a broader trade deal with China, including key issues such as rare earth minerals—a group of 17 elements critical for industries like automotive, renewable energy, and defense. China continues to dominate global rare earth production and processing.
Moreover, the White House seeks to avoid escalating trade tensions ahead of the year-end shopping season, as U.S. retailers remain heavily dependent on Chinese imports.
In early August, the U.S. relaxed certain restrictions on advanced semiconductor exports, a long-standing demand from Beijing.
On August 11, Trump authorized Nvidia to resume chip sales to China, with the condition that the company allocates 15% of its revenue from these sales to the U.S. government.
On August 20, U.S. Treasury Secretary Scott Bessent clarified that China avoided sanctions because its share of Russian oil imports only rose modestly from 13% pre-war to about 16% now, unlike India’s drastic surge. He stressed that China is not engaging in “price arbitrage” as India does.
In contrast, India increased Russian oil from under 1% to 42%, refining and reselling it for an estimated $16 billion in profits.
On August 19, White House Trade Adviser Peter Navarro became the second senior official to accuse India of excessive Russian oil purchases. Earlier, Deputy Chief of Staff Stephen Miller called the practice “unacceptable.”
However, when asked about China, Vice President JD Vance stated:
“The President is considering all options, but no final decision has been made. China is a more complex case due to broader bilateral factors beyond the Ukraine war.”
Secretary of State Marco Rubio warned of potential consequences:
“If the U.S. imposes secondary sanctions but China continues refining Russian oil and selling it globally, energy prices will spike, and consumers will bear the cost.”
In response, the Chinese Embassy in Washington reiterated that trade between Beijing and Moscow “complies with international law.”
A potential Ukraine ceasefire, accompanied by eased sanctions on Russia, could stabilize the global economy and help boost China’s recovery.
However, recent data shows China’s industrial output, investment, and retail sales all declined in July, while urban youth unemployment (ages 16–24, excluding students) rose to 17.8%—its highest level in 11 months.
Alicia Garcia Herrero, Chief Asia-Pacific Economist at Natixis, noted:
“China’s economy is showing signs of stress, though its financial institutions and businesses have long prepared for possible secondary sanctions.”
China has accelerated supply chain diversification and increased domestic production, making it less vulnerable to sanctions than before. Still, any new U.S. tariffs could push consumer prices higher in America, given the country’s reliance on Chinese goods.
In 2024, the U.S.-China trade deficit reached $295.4 billion, up 5.8% from the previous year.
On August 12, both countries agreed to extend the current tariff truce by 90 days, delaying new tariff hikes until November 10.
Earlier this year, the U.S. imposed tariffs as high as 145% on Chinese goods, while Beijing retaliated with 125% tariffs, nearly amounting to a two-way trade embargo.
The Geneva agreement in May helped cool tensions, cutting U.S. tariffs to 30% and China’s to 10%, while Beijing resumed limited rare earth exports.
Herrero believes:
“A new trade agreement is likely because both the U.S. and China need positive economic signals. Otherwise, they risk crashing into a wall.”
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